Nine Steps to a Profitable Business

Nine steps for building a business with strong margins and predictable income.

By James Schramko

Less - Success is getting clear on the things that really matter, and deleting the rest. When you've narrowed your business down to the thing you do best, the products that sell, the processes that work, the offers that profit you most, and the team and tools that get results, you can double down on and improve those to maximize your income.
Business model - The ideal business model gives you good margins and lets you earn a healthy income with consistency and without over-exerting yourself.

Look for these three elements in particular:

a. Higher price points - People typically go for low ticket, because it seems an easy entry point. What they don't realize is the volume needed to make it work, and how competitive it is. With higher-priced products, you can make good money with less buyers.

b. Recurring - When you sell a recurring product, you can more or less predict how much you'll be making periodically. The lifetime value per customer is also higher, and you won't be constantly scrambling to acquire more clients to survive.

c. Performance-based deals - Revenue share deals let you participate in someone else's business as a partner and receive a percentage of revenue when the business does well. The team, the capital, and other resources belong to your partner. All you need to contribute is your expertise, and you'll be rewarded when the company makes money.

A great offer - You need to offer value to your client, something they will happily pay for.

The main elements of a great offer are:

It has to be compelling.
It's got to be better value for the client than what they're paying.
It should be easy to understand.
It should be easy to know what the next step is.
There should be an amazing headline and bullet points and images.
There has to be proof.

When you have something worth selling, it's also worth hiring a good copywriter to get your offer effectively across.

Traffic channel - You need a core traffic channel that you can lean heavily into and sustain. Is it a podcast? YouTube videos? Social media? Determine what works best for you.
Innovation - This mitigates risk - if you want to keep the business profitable, you need to stay sharp. Stay exposed to new information. Learn from people in your clientele and industry. Have a research and development team if needed. You don't want to be the last person to find out something doesn't work anymore. That means you've got to keep an eye on your data, pay attention to what's happening.
Whitespace - Constant grinding wears people down, drains and dulls them, and just isn't sustainable. Work in blocks of time, with a healthy amount of free period in between, say three to four hours between your morning and afternoon. And take days off, don't work seven days at a stretch.
Fun - This is beyond whitespace - it's doing something on purpose that you enjoy. People think you have to work hard to succeed; the fact is, it's in the time away from work, in the state of leisure and flow, that you create space for valuable ideas you can apply to your business. And having fun resets you, lets you return to work refreshed and clearer in mind to address what you have to do.
Team - You will not build a business at scale by yourself. Not unless you write a hit song or some amazing software, or excel at revenue share deals and using someone else's team. You need at the very least a small team of assistants.

With a team, you're leveraging all the talents and synergy of people working together. They take the stuff you shouldn't do or would rather not do off your plate, and you do the high-level visionary work that's your specialty.

Invest - At some point, when you're bringing in the money, you might consider letting it work for you. Invested well, that money would be the key to your freedom five or seven years down the line. Work is almost always more pleasurable when it's an option, not a necessity. You can create that option for yourself.